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Rip Curl clothes made in North Korea

Footage shot inside a North Korean factory appears to show the manufacture of Rip Curl jackets with 'Made in China' tags.

In a major embarrassment that raises serious questions about Rip Curl's garment sourcing practices, a Fairfax Media investigation can reveal that workers at a the Taedonggang Clothing Factory near the North Korean capital Pyongyang were contracted to make some of Rip Curl's 2015 winter range of clothing.

The clothes were shipped to retail outlets and sold with a "made in China" logo on them in a practice unions and non-governmental organisations say is likely to involve other large Australian clothing brands.

Businessman Nik Halik took photos of the conditions in the North Korean factory while on a tour in July 2015. Photo: Helen Nezdropa HMN

Rip Curl has blamed one of its subcontractors for the practice.

Workers in North Korea are routinely exploited. North Korean defectors have told investigators from NGOs, including Human Rights Watch, that employees are forced to work long hours with minimal or sometimes no pay. Workers who do not obey orders are imprisoned in work camps.

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After Fairfax Media sent Rip Curl photos of its garments being made in North Korea, the company's chief financial officer Tony Roberts released a statement that said the firm "takes its social compliance obligations seriously".

"We were aware of this issue, which related to our Winter 2015 Mountain-wear range, but only became aware of it after the production was complete and had been shipped to our retail customers.

"This was a case of a supplier diverting part of their production order to an unauthorised subcontractor, with the production done from an unauthorised factory, in an unauthorised country, without our knowledge or consent, in clear breach of our supplier terms and policies.

"We do not approve or authorise any production of Rip Curl products out of North Korea."

Workers cutting fabric for Rip Curl jackets in a factory about 100 kilometres south of Pyongyang in North Korea. Photo: Anjaly Thomas

It is unclear if, prior to the approach from Fairfax Media, Rip Curl has made any effort to inform customers some of the firm's clothing was made in North Korea and falsely tagged with "made in China" labels.

A pile of ski jackets at a factory in North Korea that has been used by Rip Curl to manufacture some of their clothing. Photo: Supplied

"Australians would be shocked to hear that an iconic Australian brand with roots on the surf coast of Victoria can't confidently track clothing produced within its own supply chain.

"Rip Curl has no excuse for being unaware of what is happening. Companies are responsible for human rights abuses within their businesses – not only morally but also within international human rights frameworks," Dr Szoke said.

Rip Curl has been using North Korea factories to manufacture some of its clothing, including ski jackets, as far back as 2014. Photo: Anjaly Thomas

Mr Halik said he was shocked by his discovery and said Rip Curl customers had a right to know where the clothes were made.

Oxfam's Dr Szoke called on Rip Curl to follow other Australian companies, including Kmart, Target and Coles, that publish the exact names and locations of their supplier factories.

"Companies such as Cotton On and Forever New are moving in this direction and it's high time that Rip Curl caught up with the pack," she said.

"Rip Curl needs to show the Australian public it's serious about preventing this from happening again through a dramatic overhaul of its checks and balances. It should start by publishing its policies and a list of the factories where its products are made," Dr Szoke said.

Australian firms' garment-sourcing policies came under intense scrutiny in 2013, when hundreds of workers were killed in a Bangladeshi garment making complex, Rana Plaza, that collapsed. The tragedy caused several leading Australian brands to reform their clothes-sourcing practices.

More than 90 per cent of garments sold in Australia are estimated to be sourced from Asia, while a huge proportionate of Asian garment workers are women who are paid minimal or "poverty" wages.

Textile, Clothing and Footwear Union national secretary Michele O'Neil​ said the revelation that Rip Curl's clothing had been made in North Korea was a "shocking indictment on that company and its policies".

Ms O'Neil said she feared it was not an isolated case of a big-name brand failing to keep track of its supply chain and backed Oxfam's calls for Rip Curl to overhaul its garment sourcing practices.

"It's based solely on an endless search to find the cheapest possible labour," she said.

Ms O'Neil said the only reason Rip Curl's Chinese manufacturer would have contracted out the work to North Korea was because workers in that country were even cheaper because they had lower pay rates and worse health and safety conditions than those in China.

Rip Curl was founded in 1969 in Torquay on the Victorian surf coast and has become one of the world's biggest surf brands.